CANADA STOCKS-TSX rises on central bank hopes

Reuters Staff

4 Min Read

* TSX up 58.59 pts, or 0.5 pct, at 11,525.01
* Energy, financial shares lead gains
* Pre-Greek vote preps by central banks reassure
By Jon Cook
TORONTO, June 15 (Reuters) - Canada's main stock index was
higher on Friday, led by energy and financial shares, on
optimism over possible coordinated action by major world central
banks in the event of further financial turmoil following
Sunday's Greek election.
Officials from the G20 nations, whose leaders are meeting in
Mexico next week, said that central banks were ready to take
steps to stabilize financial markets - if needed - by providing
liquidity and prevent any credit squeeze after Sunday's
election.
Some investors are worried that if Greece moves out of the
euro zone, it could trigger a global financial meltdown similar
to the one that followed the collapse of Lehman Brothers in
2008.
"Central banks around the world are saying if it looks like
we're going to have another '08 collapse, we will step in," said
Michael Gayed, chief investment strategist at Pension Partners
LLC in New York. "That's enough to get commodities to rally."
Nearly all of Canada's 10 main sectors were higher. Gains
were led by the heavyweight oil and gas group, which rose 1
percent.
Companies on the upside included Cenovus Energy, up
1.7 percent at C$32.07, Encana Corp, which climbed 2.1
percent to C$22.04, and Suncor Energy, up 0.6 percent at
C$28.69.
At 10:51 a.m. (1451 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 58.59 points, or 0.5
percent, at 11,525.01. It was on track for its second straight
weekly gain.
Expectations of more monetary stimulus were boosted by a
British plan to flood its economy with cash, and after economic
data in the United States rekindled talk of further easing by
the Federal Reserve which holds a policy meeting next week.
The Bank of Japan left its policy unchanged after a two-day
meeting but European Central Bank President Mario Draghi
signaled a euro zone rate cut was possible and said the ECB
stood ready to support the banking system as required.
That helped Canadian financials, which rose 0.5 percent. Top
insurer Manulife Financial Corp rose nearly 2 percent
to C$10.77. Toronto-Dominion Bank edged up 0.5 percent
at C$79.16 and Bank of Montreal rose 0.4 percent to
C$54.98.
Since the last Greek election stoked fears of the
debt-ravaged nation's possible exit from the euro bloc of
countries, markets have "acted as if we were already in a
post-Lehman environment," said Gayed.
"You had 30-year Treasuries at lows not seen since after
Lehman. You had defensive sectors outperforming in ways not seen
since after Lehman and yet there's been no event. There's been
no actual Lehman scenario," he added.
The TSX's only negative sector was the defensive-oriented
healthcare group, which fell 1 percent. The small group was led
by Valeant Pharmaceuticals International Inc, which
slid 1.6 percent to C$46.32 after the Canadian drugmaker said on
Friday it will buy privately held drugmaker OraPharma for about
$312 million.
Central bank hopes offset the latest round of weak U.S.
economic data, which pointed to sluggish growth domestically. A
gauge of manufacturing in New York state fell sharply in June,
though it still showed growth, while a read on consumer
sentiment was also below consensus forecasts.
In Canada, sales of existing homes climbed 9 percent in May
from a year earlier, but prices fell 0.3 percent, the Canadian
Real Estate Association said on Friday.
In other company news, shares of Bombardier Inc
were up 2.6 percent at C$3.91 a day after the train and plane
maker signed a contract with the San Francisco Bay Area Rapid
Transit District (BART) to deliver 260 new rail cars for $631
million.